Under the new International Financial Reporting Standards, tax groups must ensure that they have a tax financing agreement that applies an “acceptable allocation method” according to the Urgent Issues Group (UIG) interpretation 1052 of tax consolidation accounting. If the tax financing agreement does not provide for an “acceptable method of allocation”, group members may be required to record in their accounts dividends and capital distributions or capital contributions considered to be capital contributions. Tax financing agreements complement tax sharing agreements and specify how subsidiaries finance the payment of taxes by the main company and when the principal is required to make payments to subsidiaries for certain tax attributes generated by subsidiaries that benefit the group as a whole (e.g. B tax losses and tax credits). We have developed a wide range of precedents documenting tax sharing and tax financing agreements. The CTSA is an agreement drafted by the management of the parent company and the subsidiary that recognizes the full value of the benefits generated by a true tax leasing product. The people who work on the details of the CSEC sharing agreement within each organization are usually tax advisors and other accountants who know how to measure and recognize these benefits. Corporate groups are encouraged to consider entering into tax sharing agreements and tax financing agreements as part of their accession to the tax consolidation system. So far, most consolidated tax groups have decided to allocate their income tax liabilities on the basis of each group member`s notional independent taxable income or on the basis of each member`s accounting profit as a percentage of the group`s total balance sheet profit. .